LLDPE supply tightens in SE Asia on low op rates, allocation cuts

29 March 2012 08:31[Source: ICIS news]

SINGAPORE (ICIS)--Supply of butene-based linear low density polyethylene (LLDPE) has tightened significantly in southeast Asia because of reduced output in the region and allocation cuts by Middle East producers SABIC and Petro Rabigh, industry sources said on Thursday.

SABIC cut its allocations to southeast Asia after diverting its supply to European markets where margins are higher, SABIC’s buyers said. The company could not be reached for comment.

Petro Rabigh has cut its second-quarter supply to southeast Asia by 30-50% as one of its LLDPE plants at Rabigh is scheduled for maintenance in April.

Indonesia-based Titan has been running its 200,000 tonne/year LLDPE at Merak at reduced rates in March because of an on-site shortage of ethylene feedstock, sources close to the company said.

Indonesia-based Chandra Asri has very limited spot supply as its 225,000 tonne/year LLDPE/high density polyethylene (HDPE) swing plant in Merak operated at 90% in March because of an on-site shortage of ethylene feedstock, a source close to the company said.

Spot LLDPE supply from Chandra Asri will remain limited in April because it has to build up stocks following the production cuts, the source said.

Titan and Chandra Asri were not immediately available for comment.

ExxonMobil, another major supplier to southeast Asia, has not been supplying much butene-based LLDPE to this region because its 600,000 tonne/year plant on Jurong Island in Singapore has been producing metallocene hexene-based LLDPE this year, buyers in southeast Asia said.

ExxonMobil produced on-spec butene-based LLDPE at one of its two new 650,000 tonne/year plants in Singapore earlier this year, but quantities have been limited and the plant was shut late last week because of technical issues, the buyers said.

The plant is expected to resume production in the middle of April, they said.

An ExxonMobil spokesperson said it is not the company’s practice to comment on operational matters at its facilities or on specific production rates.

“As you know, units at the Singapore petrochemical expansion have been progressively starting up with product qualifications under way,” the ExxonMobil spokesperson said.

Thailand’s PTT Global Chemical (PTTGC) has limited supply for April and May shipments because of production cuts in April and scheduled maintenance in May, importers in southeast Asia said.

Saudi Eastern Petrochemical (SHARQ), another major LLDPE supplier to southeast Asia, has declined requests for additional spot supply. The producer has to build up stocks before it shuts its two LLDPE plants in Saudi Arabia with a combined capacity of 750,000 tonnes/year in May for maintenance, buyers in southeast Asia said.